BMI View: The removal of economic sanctions heralds an era of uncertainty for Iran's pharmaceutical market. Underlying issues regarding the operating environment will prevent an immediate uptick in multinational drugmaker interest; rather , this will be a gradual process. Nevertheless, there has been a notable boost in international cooperation with European counterparts in particular over the past six months. T his will support the Iranian government's aim to attract greater direct investment from foreign pharmaceutical companies.
Headline Expenditure Projections
Pharmaceuticals: IRR69.55trn (USD1.93bn) in 2015 to IRR79.60trn (USD1.99bn) in 2016; +14.5% in local currency terms and +3.0% in US dollar terms. Forecast up graded from p revious quarter.
Healthcare: IRR800.60trn (USD22.24bn) in 2015 to IRR898.08trn (USD22.45bn) in 2016; +12.2% in local currency terms and +1.0% in US dollar terms. Forecast down graded from previous quarter .
|f = BMI forecast. Source: WHO, UN Comtrade, National sources, BMI|
|Pharmaceutical sales, USDbn||1.909||1.932||1.990||2.215||2.465||2.720||2.962|
|Pharmaceutical sales, % of GDP||0.45||0.44||0.59||0.58||0.59||0.59||0.60|
|Pharmaceutical sales, % of health expenditure||8.5||8.7||8.9||9.0||9.2||9.3||9.5|
|Health spending, USDbn||22.359||22.239||22.452||24.537||26.826||29.100||31.169|
Iran scores 40.4 out of 100 in terms of its attractiveness as a destination to launch innovative pharmaceuticals in Q117, maintaining its score from the previous quarter, according to our Risk/Reward Index. However, Iran has moved up one position and is now in 14th place out of 31 countries in the Middle East and Africa region. Its overall score currently sits just above the regional average of 39.8.
Generally speaking, Iran benefits from a large and growing population and relatively widespread access to healthcare services. However, its regulatory regime, including intellectual property rights and economic situation, is highly questionable. Consequently, the country performs below the regional average in terms of risk despite improvements in the political situation.
In October 2016, the Iranian Health Minister Hashemi Hassan announced plans to develop partnerships in the pharmaceutical industry with Algeria which will see Iran assist in the provision of expertise and infrastructure for production of biosimilar medicines in Algeria.
In October 2016, the head of the Atomic Energy Organization of Iran (AEOI), Ali Akbar Salehi, announced the forthcoming construction of Iran's first nuclear hospital. Costing some EUR300mn, the nuclear hospital has been financed, and the AEOI has finalised a cooperation agreement with an Austrian company for the construction.
BMI Economic View
Iran's banking sector is facing a plethora of risks despite the notable benefits from the removal of most sanctions at the start of 2016. Economic growth and access to around USD50bn in frozen assets does give the Iranian government greater firepower for capital injections and support to failing banks. However, continuing sanctions on key Iranian banks, the lack of anti-money laundering legislation and the fact that Iran is only compliant with Basel I regulations and is controlled to a large extent by members of the Iranian Revolutionary Guards Corps who remain under US and EU sanctions, might hamper growth. We forecast economic growth to pick up from 3.8% in FY2016 (fiscal year running from March 21 2015 to March 20 2016), to 5.1% by FY2017.
BMI Political View
Iran's next supreme leader will have enormous influence over the country's economic and political future. Hardline candidates have the greatest sway within the political establishment at present, and Ayatollah Mahmoud Hashemi Shahroudi is best placed to succeed Ayatollah Khamenei. This could herald a more anti-Western foreign policy stance and also greater domestic instability, as a power struggle is likely.
The Iran Pharmaceuticals & Healthcare Report features BMI Research's forecasts for drugs and healthcare expenditure and imports and exports, focusing on the growth outlook for the prescription, OTC, patented drugs and generics market segments.
BMI's Iran Pharmaceuticals & Healthcare Report provides industry professionals, strategists, company executives, investors, analysts and sales/marketing heads with independent forecasts and competitive intelligence on the Iran pharmaceutical and healthcare industry.
- Benchmark BMI's pharmaceutical and healthcare market forecasts for Iran, to test other views - a key input for successful budgeting and strategic business planning in the Iranian pharmaceutical and healthcare market.
- Target business opportunities and risks in the Iranian pharmaceutical and healthcare sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in Iran.
- Assess the activities, strategy and market position of your competitors using our company profiles (including SWOTs, KPIs and latest activity) and competitive landscape tables.
BMI Industry View
An at-a-glance perspective on the latest regulatory developments, key forecast indicators and major corporate developments, covering the prescription, OTC and generics markets. The pharmaceuticals and healthcare SWOT outlines strategic factors that affect the basic assumptions underpinning BMI’s forecast analysis, and taken together with BMI’s political, economic and business environment SWOTs, it gives a complete overview of market climate.
BMI Industry Forecast Scenario
Industry forecasts to end-2019 for all key indicators, supported by explicit assumptions, plus analysis of key downside risks to the main forecasts:
- Healthcare: Total healthcare expenditure (USDbn), healthcare expenditure (% of GDP), healthcare expenditure per capita (USD), hospital beds, doctors, and birth & mortality rates (all per ‘000 population).
- Pharmaceutical Market: Drug expenditure in USDbn, % of GDP and per capita (USD).
- Patented Drug Market: Prescription drug sales (USDbn & % of total sales).
- Generic Drug Market: Generic product sales (USDbn), generic sales (% of total sales).
- OTC Drug Market: OTC sales (USDbn & % of total sales).
- Macroeconomic Forecasts: Nominal and real GDP, % real GDP growth, % private consumption growth, % industrial output growth, % consumer price index, % GDP price deflator, exports, imports, trade balance, current account balance, foreign direct investment, exchange rate against USD, government expenditure and external debt.
BMI’s Pharmaceuticals and Healthcare Risk Reward Index
BMI’s Risk Reward Index provides investors (both national and multinational) looking for opportunities in the region with a clear country-comparative assessment of the market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.
A snapshot of key market characteristics, including total size of the pharmaceuticals and healthcare segments, growth drivers, leading therapeutic areas and the competitive landscape
A focus on government healthcare reforms, epidemiological trends, mergers and acquisitions, product launches, market entries, FDI activity, R&D, biotechnology, clinical trials and supply chain issues.
Details of the industry regulatory framework and key legislation covering the licensing of new products/services, pricing and reimbursements, intellectual property, taxation and advertising, as well as analysis of the overall regulatory burden.
The competitive landscape section provides comparative company analyses and index by USD sales and % share of total sales – for the total pharmaceutical sector, as well as the OTC, generics and distribution sub-sectors.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT analyses. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.